Productivity linked to Compassionate Leadership

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A major new business research study by the Australian School of Business has shown a powerful link between productivity and ‘compassionate leadership’.

The study, which has taken in data from more than 5600 people in 77 organisations, shows that of all the various elements in business, the ability of a leader to be compassionate has the greatest correlation with profitability and productivity.

As this report published today on the UNSW website outlines, the findings correlate with the theory recently advanced by the Director of Social Leadership Australia, Geoff Aigner, in his book, Leadership Beyond Good Intentions – What It Takes To Really Make A Difference.

It includes some surprising ideas:

Compassion should not be confused with kindness – it’s not about ‘being nice to people’ – sometimes you have to be cruel to be kind.

It’s the lowest level of leaders that drives a company’s profitability – because frontline managers are more customer-facing and more more impact. Leadership exists at all levels – and compassion is a two-way thing – it flows from top down abut also from bottom up. Hard conversations must be initiatied by all staff.

In high-performing workplaces, leaders are about one-fifth to one-third more compassionate (the report provides statistics on nine measures.)

There’s a link between power and compassion. In organisations where leaders do not ‘own’ their power, there is little compassion.

Another problem is Australia’s ‘adolescent’ relationship to power – “we are either attacking it or seducing it.”

To develop compassionate leadership, managers need to take the often awkward step of becoming more aware of their own human failings.

Are Australian executives scared of engaging in a deeper conversation about how they exercise power and their own capacity for leadership?

Geoff Aigner says, “You only have to scratch the surface to see the real desire to do the job well and make organisations more responsbile, more useful and more effective, and for people to reach their full potential. I see a real desire to leave a legacy of more than just this year’s financial statement.”